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federal budget

The Trump Administration’s proposed U.S. Department of Education budget, released yesterday, is due some props. It would cut spending by about 10 percent from 2019, and kill some bad programs. But there’s also a downside: it would push federal tentacles further toward private schools, and deeper into charters. Which means the lesson still hasn’t been learned: The Constitution gives Washington no authority to govern in education, and that includes advancing ideas the Trump Administration—and I!—like.

Let’s first acknowledge that it takes some guts to cut education department funding, because the average person probably hears “cuts to education” and thinks “oh no, cutting education!” What they should hear is “cutting spending in the name of education, but that often has very dubious educational effects.”

That’s the federal government’s own yardstick showing stagnation, despite real spending from all sources per public K-12 student, and total federal elementary and secondary outlays, more than doubling since 1970. (The massive leap in federal spending in 2009 is the Obama “stimulus.”)

The administration will be bludgeoned with woeful rhetoric for these proposed cuts, but they are the right thing to do.

School choice is also good, but trying to expand it through Washington, as this budget calls for, is wrong, both constitutionally and if we desire maximum choice. As I wrote last week about the Administration’s proposal for a $5 billion scholarship tax credit, “what the feds fund, even indirectly, they inevitably want to control.”

Ever since President Trump and budget director Mick Mulvaney released a proposed federal budget that includes cuts in some programs, the Washington Post has been full of articles and letters about current and former officials and program beneficiaries who don’t want their budgets cut. Not exactly breaking news, you’d think. And not exactly a balanced discussion of pros and cons, costs and benefits. Consider just today’s examples:

The American Public Transit Association (APTA) has a new report on the economic impact of President Trump’s proposal to stop wasting federal dollars on digging holes and filling them up. Actually, the report is about Trump’s proposal to stop wasting federal dollars building streetcars, light rail and other local rail transit projects, but the two have almost exactly the same effect.

The Washington Post’sDavid Fahrenthold counts six budget “showdowns” in Washington over the past two and half year. The looming battle this fall over funding the government and raising the debt ceiling will be number seven. That led Fahrenthold to examine what the six showdowns have accomplished with regard to the size of government.

In sum: we had big government two and half years ago and today we have…big government.

Some left-leaning pundits are in a tizzy that the Washington Post would dare run an article that doesn’t speak of “draconian” spending cuts to “popular programs.” Instead, Fahrenthold looked at four measures and concluded that little has changed: federal spending is slightly down, the number of federal employees is slightly down, the number of regulations is up, and the federal government still has a lot of real estate.

Fahrenthold’s sin (one of them) is that in pointing out that spending has gone flat after the bipartisan spending explosion of the 2000s he didn’t recognize the alleged virtues of increasing government spending to “stimulate” the economy. I’m guessing Fahrenthold didn’t get the memo that a journalist writing for a mainstream news outlet is supposed to supply a quote from some macroeconomic forecasting Nostradamus like Mark Zandi.

I do wish, however, that Fahrenthold would have explicitly differentiated between the size and scope of government. When it comes to the scope of government activity—basically, what all Uncle Sam does—I don’t know how anyone could argue that it has receded in the past two and a half years. Or the past ten years. Or, well, you get the point.

Today’s Washington Post has an excellent article by David A. Fahrenthold on the gimmicks used by both Democrats and Republicans in the April 2011 budget deal to create phantom ‘cuts’ in federal spending:

You know the cliché: America’s fiscal condition might be grim, but lawmakers should avoid the “meat ax” of across-the-board spending cuts and instead use the “scalpel” of targeted reductions. …Targeted reductions would be welcome, but the current federal budget didn’t drop from the sky. Every program in the budget—from defense to food stamps, agriculture, Medicare and beyond—is in place for a reason: It has advocates in Congress and a constituency in the country. These advocates won’t sit idly by while their programs are targeted, whether by a scalpel or any other instrument. That is why targeted spending cuts have historically been both rare and small.

Bergner explains that small across-the-board cuts are very reasonable:

The most likely way to achieve significant reductions in spending is by across-the-board cuts. Each reduction of 1% in the $3.6 trillion federal budget would yield roughly $36 billion the first year and would reduce the budget baseline in future years. Even with modest reductions, this is real money. …let’s give up the politically pointless effort to pick and choose among programs, accept the political reality of current allocations, and reduce everything proportionately. No one program would be very much disadvantaged. In many cases, a 1% or 3% reduction would scarcely be noticed. Are we really to believe that a government that spent $2.7 trillion five years ago couldn’t survive a 3% cut that would bring spending to “only” $3.5 trillion today? Every household, company and nonprofit organization across America can do this, as can state and local governments. So could Washington.

And he turns the fairness argument back on critics, explaining that it is a virtue to treat all programs similarly:

Across-the-board federal cuts would have to include all programs—no last-minute reprieves for alternative-energy programs, filmmakers or any other cause. All parties would know that they are being treated equally. Defense programs, food-stamp recipients, retired federal employees, the judiciary, Social-Security recipients, veterans and members of Congress—each would join to make a minor sacrifice. It would be a narrative of civic virtue.

It’s worth noting, however, that the sequester would not treat all programs equally. Defense spending is only about 20 percent of the budget, for instance, yet the Pentagon will absorb 50 percent of the savings (though defense spending still increases over the next 10 years).

At the risk of oversimplifying, the sequester basically applies to so-called discretionary spending. So-called mandatory spending accounts for a majority of federal spending, but it is largely exempt, so entitlement reform will still be necessary if we want to address the nation’s long-run fiscal challenges.